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BRAIT SE - Unaudited interim results for the six months ended 30 September 2017

Release Date: 15/11/2017 08:00
Code(s): BAT     PDF:  
Wrap Text
Unaudited interim results for the six months ended 30 September 2017

BRAIT SE
(Registered in Malta as a European Company)
(Registration No. SE1)
Share code: BAT ISIN: LU0011857645
Bond code: WKN: A1Z6XC ISIN: XS1292954812
LEI code: 549300VB8GBX4UO7WG59
("Brait", the "Company" or "Group")

UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2017

KEY HIGHLIGHTS 
–  Brait's reported Rand NAV per share at 30 September 2017 is ZAR66.62
-  For the quarter, this represents a decrease of 10.1% compared to the ZAR74.14 reported at 30 June 2017
-  For the six month period, this represents a decrease of 14.8% compared to 31 March 2017's reported NAV per share of ZAR78.15
-  For the twelve month period, this represents a decrease of 36.6% compared to 30 September 2016's NAV per share of ZAR105.06
-  The three year CAGR for reported Rand NAV per share to 30 September 2017 is 24.2% per annum (benchmark of 15% per annum); including ordinary
   share dividends it is 25.5%
-  Since 1 April 2011's NAV per share of ZAR16.50, the 6.5 year CAGR to 30 September 2017 for reported Rand NAV per share is 24.0% per annum

Performance against targets (1)

             Performance metric                          Position at 30 September 2017

 1  NAV CAGR > 15% per year over any                 - 24.2% CAGR since 30 September 2014
    3 year period                                    - 24.0% CAGR since 1 April 2011

 2  Dividend: 1% – 2.5% of closing NAV               - FY2017: 1% of R78.15 NAV paid August 2017 (2)
    – bonus shares or cash dividend alternative
                                                    
 3  Operating costs: < 0.85% of Brait AUM            - 0.61% of average AUM (3) (FY2017: 0.64%)
                                                     - 0.54% net after fee income (3) (FY2017: 0.54%)

 4  Minimal cash drag: < 25% of NAV                  - 9.7% of NAV (FY2017: 8.3%)

 5  Primarily unlisted investments                   - 100% of investment portfolio

 6  Demonstrate cash flow within underlying          - Strong cash flow conversion across portfolio
    investments over any 3 year period  
     
(1) Going forward, shareholders are notified that in line with other listed investment companies, Brait will update the market on its NAV per 
    share on a six monthly basis at interim and final reporting dates

(2) Shareholder election: 26% elected to receive bonus shares, 43% elected to reinvest their cash dividend of R169m and subscribe for new shares; 
    and the remaining 31% elected to receive their cash dividend of R121m

(3) Percentages quoted are annualised based on operating expenses of R135 million and fee income of R15 million for the six months ended 30 September 2017. 
    (FY2017: Operating expenses R401 million; fee income R62 million). Brait's average AUM for the six months ended 30 September 2017 is R45 billion (FY2017: R63 billion)

Summary consolidated statement of financial position as at 30 September

   Audited         Unaudited                                                                    Unaudited            Audited
year ended        six months                                                                   six months         year ended
  31 March    30 Sept     30 Sept                                                         30 Sept      30 Sept      31 March
      2017      2016         2017                                                            2017         2016          2017
       R'm       R'm          R'm                                                Notes      EUR'm        EUR'm         EUR'm
                                     ASSETS
    44 408    58 142       40 023    Non-current assets                                     2 499        3 767         3 100
    44 408    58 142       40 023    Investments                                     2      2 499        3 767         3 100
     3 289     3 602        3 290    Current assets                                           205          233           230
         5         4            3    Accounts receivable                                        –            –             –
     3 284     3 598        3 287    Cash and cash equivalents                       3        205          233           230

    47 697    61 744       43 313    Total assets                                           2 704        4 000         3 330
                                     EQUITY AND LIABILITIES
    39 580    53 277       33 851    Ordinary shareholders equity and reserves       4      2 114        3 451         2 763
     8 065     8 366        9 200    Non-current liabilities                                  574          542           563
     5 396     5 630        5 883    Convertible Bonds                               5        367          365           377
     2 669     2 736        3 317    Borrowings                                      6        207          177           186
        52       101          262    Current liabilities                                       16            7             4
        52       101          262    Accounts payable and other liabilities                    16            7             4

    47 697    61 744       43 313    Total equity and liabilities                           2 704        4 000         3 330
     520.6     521.0        525.6    Ordinary shares in issue (m)                           525.6        521.0         520.6
    (14.6)    (13.9)       (17.5)    Treasury shares (m)                                   (17.5)       (13.9)        (14.6)
     506.0     507.1        508.1    Outstanding shares for NAV calculation (m)             508.1        507.1         506.0
     7 815    10 506        6 662    Net asset value per share (cents)                        416          681           546

Summary consolidated statement of comprehensive income for the six months ended 30 September

   Audited         Unaudited                                                                        Unaudited           Audited
year ended        six months                                                                       six months        year ended
  31 March   30 Sept      30 Sept                                                             30 Sept      30 Sept     31 March
      2017      2016         2017                                                                2017         2016         2017
       R'm       R'm          R'm                                                      Note     EUR'm        EUR'm        EUR'm

  (15 085)   (3 915)      (7 957)    Investment losses                                          (530)        (240)        (978)
       244       122          125    Interest income                                                8            7           16
       409        80           71    Dividend income                                                5            5           27
        62        32           15    Fee income                                                     1            2            4
     (319)     (264)          211    Foreign exchange gains/(losses)                               14         (16)         (21)
     (401)     (228)        (135)    Operating expenses                                           (9)         (14)         (26)
      (76)      (66)            –    Other expenses                                                 –          (4)          (5)
     (659)     (274)        (317)    Finance costs                                               (21)         (17)         (43)
      (29)       (7)            7    Taxation                                                       –            –          (2)
  (15 854)   (4 520)      (7 980)    Loss for the period                                        (532)        (277)      (1 028)
                                     Other comprehensive income
  (12 879)  (10 565)        2 540    Translation adjustments                                     (98)        (337)        (266)
  (28 733)  (15 085)      (5 440)    Comprehensive loss for the period                          (630)        (614)      (1 294)
   (3 119)     (887)      (1 577)    Loss and Headline loss per share (cents) – basic    7      (105)         (54)        (202)
   (2 809)     (785)      (1 421)    Loss and Headline loss per share (cents) – diluted  7       (95)         (48)        (182)

Summary consolidated statement of changes in equity for the six months ended 30 September

   Audited         Unaudited                                                                              Unaudited           Audited
year ended        six months                                                                             six months        year ended
  31 March   30 Sept     30 Sept                                                                   30 Sept      30 Sept      31 March
      2017      2016        2017                                                                      2017         2016          2017
       R'm       R'm         R'm                                                          Note       EUR'm        EUR'm         EUR'm

    69 872    69 872      39 580     Ordinary shareholders' balance at beginning of period           2 763        4 164         4 164
  (15 854)   (4 520)     (7 980)     Loss for the period                                             (532)        (277)       (1 028)
  (12 879)  (10 565)       2 540     Translation adjustments                                          (98)        (337)         (266)
     (930)     (881)       (168)     Net purchase of treasury shares                                  (11)         (57)          (65)
         –         –         169     Cash dividend reinvestment                               4         11            –             –
     (629)     (629)       (290)     Cash dividend paid                                       4       (19)         (42)          (42)
    39 580    53 277      33 851     Ordinary shareholders' balance at end of period                 2 114        3 451         2 763

Summary consolidated statement of cash flows for the six months ended 30 September

   Audited         Unaudited                                                                               Unaudited             Audited
year ended        six months                                                                              six months          year ended
  31 March    30 Sept     30 Sept                                                                    30 Sept      30 Sept       31 March
      2017       2016        2017                                                                       2017         2016           2017
       R'm        R'm         R'm                                                           Note       EUR'm        EUR'm          EUR'm

                                     Cash flows from operating activities
       300          7          28    Investment proceeds received                                          2            –             21
        56         30          13    Fees received                                                         1            2              4
        65         41          24    Interest received                                                     2            3              4
       266          –           –    Dividends received                                                    –            –             18
     (401)      (225)       (140)    Operating expenses paid                                             (9)         (15)           (26)
      (59)          –        (10)    Other expenses paid                                                 (1)            –            (4)
      (35)       (11)          –     Taxation paid                                                         –          (1)            (2)
       192      (158)        (85)    Operating cash flow before investments                              (5)         (11)             15
     (190)       (92)       (226)    Purchase of investments                                            (15)          (6)           (12)
         2      (250)       (311)    Net cash (used in)/from operating activities                       (20)         (17)              3
     1 491      1 550         500    Net drawdown of borrowings                                           33          101             85
     (391)       (86)       (109)    Finance costs paid                                                  (7)          (6)           (24)
     (710)      (661)       (168)    Net purchase of treasury shares                                    (11)         (43)           (42)
     (629)      (629)       (290)    Cash dividend paid                                                 (19)         (41)           (42)
         –          –         169    Cash dividend reinvestment                                           11            –              –
     (239)        174         102    Net cash from/(used in) financing activities                          7           11           (23)
     (237)       (76)       (209)    Net decrease in cash and cash equivalents                          (13)          (6)           (20)
     (833)      (680)         212    Effects of exchange rate changes on cash and cash equivalents      (12)         (21)           (10)
     4 354      4 354       3 284    Cash and cash equivalents at beginning of period                    230          260            260
     3 284      3 598       3 287    Cash and cash equivalents at end of period                 3        205          233            230

Notes to the summary consolidated financial statements for the six months ended 30 September

1  ACCOUNTING POLICIES
   1.1  Basis for preparation
        The financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by
        the European Union, on the going concern principle, using the historical cost basis, except where otherwise indicated. The summarised
        financial statements are presented in accordance with IAS 34: Interim Financial Reporting and in accordance with the framework concepts,
        measurement and recognition requirements of IFRS. The accounting policies and methods of computation are consistent with those applied
        in the Group annual financial statements for the year ended 31 March 2017. The Group has only one operating segment being that of an
        investment holding company.

        The Group's financial statements are prepared using both the Euro (EUR) and SA Rand (R/ZAR) as its presentation currencies. The Group's
        subsidiaries have one of three functional currencies: Pound Sterling (GBP), SA Rand or US Dollar (USD/US$). The holding company, Brait SE,
        and its main consolidated subsidiaries use GBP as their functional currency. The financial statements have been prepared using the following
        exchange rates:
                            30 September 2017                          31 March 2017                        30 September 2016
                          Closing            Average             Closing             Average            Closing            Average
        USD/ZAR           13.5655            13.1902             13.4247             14.0513            13.7268            14.5313
        GBP/ZAR           18.1636            17.0727             16.8674             18.4171            17.8155            19.9926
        EUR/ZAR           16.0183            15.0119             14.3232             15.4319            15.4336            16.3167
        USD/EUR            0.8469             0.8786              0.9373              0.9105             0.8894             0.8906
        GBP/EUR            1.1339             1.1373              1.1776              1.1934             1.1543             1.2253

2. INVESTMENTS
   The Group designates the majority of its financial asset investments as at FVTPL as the Group is managed on a fair value basis, with any resultant
   gain or loss recognised in investment gains/losses. Fair Value is determined in accordance with IFRS 13.

   Statement of financial position items carried at fair value include investments in equity instruments and shareholder funding instruments.
   
   The Group applies a number of methodologies to determine and assess the reasonableness of the fair value, which may include the following:
   –  Earnings multiple
   –  Recent transaction prices
   –  Net asset value
   –  Price to book multiple

   Listed investments are held at recent quoted transaction prices. Where the listed investment is either thinly traded and/or the market is inactive, the
   valuation applied to determine the carrying value is based on the applicable unlisted investment methodology set out below.

   The primary valuation model utilised for valuing unlisted portfolio investments is the maintainable earnings multiple model.

   Maintainable earnings are derived with reference to the mix of prior year audited and latest available current year forecast EBITDA per the portfolio
   company, adjusted for any non-recurring income/expenditure. As the year progresses, so the weighting is increased towards the portfolio
   company's forecast.

   The Directors decide on an appropriate group of comparable quoted companies from which to base the EV/EBITDA multiple. The three year trailing
   average multiple of the comparable quoted companies, is adjusted for points of difference, where required, to the portfolio company being valued.
   The peer average spot multiple at reporting date is also considered. The equity valuation takes consideration of the portfolio company's net debt/cash
   on hand as per its latest available financial results. Further valuation information can be obtained from the 30 September 2017 investor presentation
   on the Group's website, www.brait.com.

   31 March   30 Sept   30 Sept                                         30 Sept  30 Sept    31 March
       2017     2016       2017                                            2017     2016        2017
        R'm      R'm        R'm                                           EUR'm    EUR'm       EUR'm
     44 408   58 142     40 023   The Group's porfolio of investments     2 499    3 767       3 100
     15 516   16 107     17 726   Virgin Active                           1 107    1 044       1 083
     12 395   13 485     12 030   Premier                                   751      874         865
      7 367    7 660      8 511   Iceland Foods                             531      496         514
      7 066   18 726          –   New Look                                    –    1 213         493
      2 064    2 164      1 756   Other investments                         110      140         145

   Valuation metrics                         30 September 2017                30 September 2016                       31 March 2017
                                                             3rd Party                         3rd Party                              3rd Party
                                        EBITDA      Multiple  Net Debt   EBITDA     Multiple    Net Debt    EBITDA      Multiple       Net Debt

   Virgin Active (GBP'm)                   139         11.4x       336      135        11.4x         370       140         11.4x            411
   Premier (R'm)                         1 170         12.4x     1 768    1 211        13.2x       1 508     1 140         13.2x          1 850
   Iceland Foods (GBP'm)                   163          9.0x       687      153         9.4x         688       160          9.0x            675
   New Look (GBP'm)                                   Note 1                203        11.3x       1 100       155         10.3x          1 136
   Other investments                                  varied                          varied                              varied
   
   *Note 1  Until such time as its turnaround strategy has taken shape, New Look is valued at Nil

   Fair Value Hierarchy
   IFRS 13 provides a hierarchy that classifies inputs used to determine fair value. Investments measured and reported at fair value are classified and
   disclosed in one of the following categories:
   Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities.
   Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) 
   or indirectly (i.e. derived from prices).
   Level 3  Inputs for the assets or liability that are not based on observable market data
   There are no financial assets that are categorised as Level 1 and Level 2 and no transfers between levels in the current or prior year. All Level 3
   investments have been valued using a maintainable earnings multiple model.

        R'm         30 September 2017                                    EUR'm
     17 726         Virgin Active                                        1 107
      9 010         Premier                                                562
      8 511         Iceland Foods                                          531
      1 514         Other investments                                       95
     36 761         Investments at fair value                            2 295
      3 020         Premier shareholding funding                           189
        242         Other investments shareholder funding                   15
      3 262         Investments at amortised cost                          204
     40 023         Total investments                                    2 499

   Audited        Unaudited                                                                                              Unaudited         Audited
year ended       six months                                                                                             six months      year ended
  31 March  30 Sept     30 Sept                                                                                    30 Sept     30 Sept    31 March
      2017     2016        2017                                                                                       2017        2016        2017
       R'm      R'm         R'm                                                                                      EUR'm       EUR'm       EUR'm

                                  3.   CASH AND CASH EQUIVALENTS
     3 284    3 598       3 287        Balances with banks                                                             205         233         230
       196      171         270        – ZAR cash                                                                       17          11          14
        77       78          96        – USD cash                                                                        6           5           5
     3 011    3 349       2 921        – GBP cash                                                                      182         217         211

    39 580   53 277      33 851   4.   ORDINARY SHAREHOLDERS' EQUITY AND RESERVES                                    2 114       3 451       2 763
                                       Share Capital and Premium
                                       Authorised share capital
                                       1 500 000 000 at par value of EUR0.22 per share
                                       Issued share capital
                                       31 March 2017                                           521 012 174
                                       Bonus share issue                                         1 665 192  (1)
                                       Cash dividend reinvestment                                2 921 849  (2)
                                       30 September 2017                                       525 599 215
                                           
                                       (1) 26% of shareholders elected bonus shares

                                           The par value of the bonus shares issued are accounted for in Ordinary Share
                                           Premium with no adjustment to any other reserves in Equity. The bonus share
                                           issue option was converted at the 15 day Volume Weighted Average Price
                                           (VWAP) of R62.37 per share to result in the R0.7815/EUR0.0525 dividend per share
                                           translating into 1.25301 shares for every 100 shares held.
                                           
                                       (2) 43% of shareholders elected to reinvest their cash dividend of ZAR169 million.
                                           The remaining 31% of shareholders elected to receive cash of R121 million.
                                           
                                       (3) The dividend amount reflected for 30 September 2016 is ZAR629 million.
                                           The variance of R19 million to the amount previously reported is due to a
                                           classification change with the line item "Translation Adjustments".

   Audited        Unaudited                                                                                         Unaudited         Audited
year ended       six months                                                                                        six months      year ended
  31 March   30 Sept    30 Sept                                                                               30 Sept     30 Sept    31 March
      2017     2016        2017                                                                                  2017        2016        2017
       R'm      R'm         R'm                                                                                 EUR'm       EUR'm       EUR'm
                                  5.   CONVERTIBLE BONDS
     5 396    5 630       5 883        On 18 September 2015 Brait received GBP350 million from                    367         365         377
                                       the issuance of its five year unsubordinated, unsecured
                                       convertible bonds (Bonds). The Bonds carry a fixed coupon of
                                       2.75% per annum payable semi-annually in arrears.

                                       The initial conversion price of GBP7.9214 per ordinary share
                                       represented a 30% premium to the VWAP of Brait's ordinary
                                       shares between launch and pricing on 11 September 2015.
                                       The adjusted conversion price at reporting date is GBP7.7613
                                       per ordinary share, which takes into account Brait's bonus share
                                       issue and cash dividend alternative since date of issuance,
                                       in accordance with the Bonds' terms and conditions. Using
                                       the adjusted conversion price, the Bonds will convert into
                                       45,095,538 ordinary shares (8.6% of Brait's current issued share
                                       capital) on exercise of bondholders conversion rights. In the
                                       event that the bondholders have not exercised their conversion
                                       rights, the Bonds are settled at par value in cash on maturity on
                                       18 September 2020. Brait has a soft call to early settle the Bonds
                                       at their par value after 9 October 2018 if the value of the ordinary
                                       shares underlying the Bonds is equal to or exceeds GBP130,000
                                       for more than 20 of the 30 consecutive trading days up to
                                       9 October 2018.

                                       The Bonds are listed on the Open Market (Freiverkehr)
                                       segment of the Frankfurt Stock Exchange.

                                  6.   BORROWINGS
     2 669    2 736       3 317        The loan from First Rand Bank Limited (trading through its                 207         177        186
                                       Rand Merchant Bank division) and The Standard Bank of
                                       South Africa Limited is Rand denominated, bears interest at
                                       JIBAR plus 3.0% repayable quarterly, with a right to rollup.
                                       The ZAR8.5 billion facility expires in December 2020 and is
                                       secured by Group assets.

   Audited        Unaudited                                                                                          Unaudited        Audited
year ended       six months                                                                                         six months     year ended
  31 March  30 Sept    30 Sept                                                                                30 Sept     30 Sept    31 March
      2017     2016       2017                                                                                   2017        2016        2017
       R'm      R'm        R'm                                                                                  EUR'm       EUR'm       EUR'm

                                  7.   HEADLINE EARNINGS RECONCILIATION
  (15 854)  (4 520)    (7 980)         Loss and Headline loss for the period                                    (532)       (277)     (1 028)
       508      510        506         Weighted average ordinary shares in issue (m) – basic                      506         510         508
   (3 119)    (887)    (1 577)         Loss and headline loss per share (cents) – basic                         (105)        (54)       (202)

  (15 854)  (4 520)    (7 980)         Loss and Headline loss for the period                                    (532)       (277)     (1 028)
       318      171        150         Adjustment for Bond interest saved if Bond converted to shares              10          10          21
  (15 536)  (4 349)    (7 830)         Diluted loss and Headline loss                                           (522)       (267)     (1 007)
       553      554        551         Weighted average ordinary shares in issue (m) – diluted (1)                551         554         553
   (2 809)    (785)    (1 421)         Loss and headline loss per share (cents) – diluted                        (95)        (48)       (182)
                                       
                                       (1)  All ordinary shares underlying the Bonds are treated as dilutive and weighted from
                                            issue of the Bonds on 11 September 2015

                                   8.  RELATED PARTIES
                                       Transactions between the Company and its subsidiaries have
                                       been eliminated on consolidation or on fair value of subsidiaries
                                       and are not disclosed in this note. During the year, Group
                                       companies entered into the following transactions with related
                                       parties who are not members of the Group:

                                       Loss from operations include:

      (17)      (9)        (8)         Non-executive directors fees                                               (1)         (1)         (1)
       (5)      (1)        (1)         Professional fees – M Partners S.à r.l                                       –           –           –
       (1)      (3)        (1)         Professional fees – Maitland International Holdings Plc                      –           –           –
       (8)        –          –         Other expenses – Maitland International Holdings Plc                         –           –         (1)

   Audited           Unaudited                                                                                   Unaudited            Audited
year ended          six months                                                                                         six months  year ended
  31 March  30 Sept    30 Sept                                                                                30 Sept     30 Sept    31 March
      2017     2016       2017                                                                                   2017        2016        2017
       R'm      R'm        R'm                                                                                  EUR'm       EUR'm       EUR'm
       
                                   9.  CONTINGENT LIABILITIES AND COMMITMENTS       
                                       9.1 Contingencies       
     2 048     1 942     2 160             Loan to Fleet Holdings Ltd (Fleet)                                     135         126         143
   (2 048)   (1 942)   (2 160)             Loan from Fleet                                                      (135)       (126)       (143)
         –         –         –             Net loan to Fleet                                                        –           –           –
                                           Fleet (the Investment Team's SPV) refinanced its loan
                                           from the Group with The Standard Bank of South Africa
                                           Limited and First Rand Bank Limited (trading through
                                           its Rand Merchant Bank division) ("The Lenders").
                                           The proceeds from the refinance were advanced back to
                                           the Group as a new separate loan.

                                           The loans both bear interest at the 3 month
                                           Johannesburg Inter Bank Acceptance Rate ("JIBAR") plus
                                           3.45%, with the right to roll up interest. The loans both
                                           mature on 4 July 2021.

                                           Brait has provided the Lenders to Fleet with an indemnity
                                           for the amount owing, for which Brait holds collateral in
                                           the form of the pledged Brait shares held by Fleet and
                                           the Investment Team. The amount owing is repayable to
                                           the Lenders on maturity, at which time the indemnity will
                                           either be released or claimed by the Lenders. Applying the
                                           closing 30 September 2017 Brait share price of ZAR53.50,
                                           the market value of the pledged shares is ZAR440 million
                                           less than the amount owing to the Lenders. Given the
                                           remaining term is more than three years, this amount is
                                           disclosed as a contingent liability at reporting date.

                                       9.2 Commitments
     6 472    6 920       6 882            Convertible Bond commitments                                             430         448         451
       162      171         175                – Coupon payments due within one year                                 11          11          11
       406      514         350                – Coupon payments due between one and five years (1)                  22          33          28
     5 904    6 235       6 357                – Principal settlement due within five years (1)                     397         404         412
                                        
                                           (1) The coupon payments due amounts reflect the semi-annual coupons
                                               payable in arrears over the Bond's five year term. The principal settlement
                                               due amount is only payable in the event that the bondholders have not
                                               exercised their conversion rights. Brait has a soft call to early settle the
                                               Bonds at their par value after 9 October 2018 if the value of the ordinary
                                               shares underlying the Bonds is equal to or exceeds GBP130,000 for more
                                               than 20 of the 30 consecutive trading days up to 9 October 2018. If the soft
                                               call is exercised, coupons from 18 September 2018 to 18 September 2020
                                               will not be payable.

      121       119         88                 Private equity funding commitments                                     5           8           8
                                               Rental commitments (Malta and Mauritius)
        2         2          2                 – Within one year                                                      –           –           –
        3         3          3                 – Between one and five years                                           –           –           –
     6 598    7 044       6 975                Total commitments                                                    435         456         459

9.3 Other
    The Group has rights and obligations in terms of shareholder or purchase and sale agreements relating to its present or former investments.

10  POST BALANCE SHEET EVENTS
    No events have taken place between 30 September 2017 and the date of the release of this report, which would have a material impact on either the
    financial position or operating results of the Group.

Review of operations

The Board of Directors hereby report to shareholders on the Group's interim results at 30 September 2017.

VALUE DRIVERS
Growth in NAV is the Group's key performance measure together with the following additional factors comprising the core value drivers of the business:
–  Low cost to Assets Under Management ("AUM") ratio;
–  Minimal balance sheet cash drag;
–  Significant cash flow within the investment portfolio; and
–  Predictable and consistent ordinary dividend to closing NAV yield.

Going forward, shareholders are notified that in line with other listed investment companies, Brait will update the market on its NAV per share on a six
monthly basis at interim and final reporting dates.

Growth in NAV
Brait's valuation policy is to reference the EV/EBITDA valuation multiple on a historical basis for each of its investments to their peer group's trailing three
year average multiple. At 30 September 2017, the EV/EBITDA historical valuation multiples used were:

                           30 September 2017                               30 September 2016
                          Valuation            Peer average:              Valuation          Peer average:
                      multiple used          3 year trailing          multiple used        3 year trailing
Virgin Active                 11.4x                    13.7x                  11.4x                  13.8x
Premier                       12.4x                    13.3x                  13.2x                  13.2x
Iceland Foods                  9.0x                    11.4x                   9.4x                  10.0x
New Look                     Note 1                    14.1x                  11.3x                  14.9x

The discount/(premium) when comparing the valuation multiples used to respective peer average multiples are:
                            30 September 2017                              30 September 2016
                          Discount/(premium) to:                         Discount/(premium) to:
                      Peer average:            Peer average:          Peer average:            Peer average:
                    3 year trailing                     spot        3 year trailing                    spot
Virgin Active                   17%                      15%                    17%                     17%
Premier                          7%                    (10%)                      –                      6%
Iceland Foods                   21%                      20%                     6%                      7%
New Look                     Note 1                   Note 1                    24%                     10%

Note 1: Until such time as its turnaround strategy has taken shape, Brait's investment in New Look is valued at nil.

The NAV break-down is as follows:

   30 Sep          30 Sep                                                                                  30 Sep   30 Sep
     2016            2017                                                                                    2017     2016
    ZAR'm           ZAR'm                                                                              %    EUR'm    EUR'm

   58 142          40 023       Investments                                                           93    2 499    3 767

   16 107          17 726       Virgin Active                                                         41    1 107    1 044
   13 485          12 030       Premier                                                               28      751      874
    7 660           8 511       Iceland Foods                                                         20      531      496
   18 726               –       New Look                                                               –        –    1 213
    2 164           1 756       Other investments                                                      4      110      140

    3 598           3 287       Cash and cash equivalents                                             7      205      233
        4               3       Accounts receivable                                                   –        –        –

   61 744          43 313       Total assets                                                         100    2 704    4 000
    8 467           9 462       Total liabilities                                                             590      549

    2 736           3 317       Borrowings                                                                     207     177
    5 630           5 883       Convertible bond                                                               367     365
      101             262       Accounts payable                                                                16       9
 
   53 277          33 851       Net asset value                                                              2 114    3 451
   507.10          508.12       Number of issued ordinary shares ('mil‚ excluding treasury shares)          508.12   507.10
   10 506           6 662       Net asset value per share (cents)                                              416      681

KEY HIGHLIGHTS FOR THE GROUP'S INVESTMENT PORTFOLIO ARE: 

Virgin Active
–  For the nine months ended 30 September 2017, Revenue and EBITDA in Pound Sterling, for continuing operations, increased by 15% and 16% on the
   comparative period respectively. On a constant currency basis, Revenue and EBITDA for continuing operations increased by 5% and 2% respectively.
–  The discontinued operations relate to the value enhancing disposals of (i) 36 non-core UK traditional clubs, of which 35 were sold to Nuffield Health in
   July 2016; (ii) 14 racquet clubs sold to David Lloyd Leisure, which completed on 31 May 2017; and (iii) the non-core Iberian business, with 8 clubs in
   Spain and 4 clubs in Portugal sold to Holmes Place on 2 October 2017.
–  On a continuing operations basis, 17 new clubs opened during the last twelve months, of which 9 were opened in the current nine month period
   (5 in South Africa, 2 in Asia Pacific, 1 in Italy and 1 in the UK) giving a total of 236 clubs and 1.2 million members as at 30 September 2017.
–  On a continuing operations basis, for the current 9 month period, Asia Pacific, Italy and the UK territories each generated growth in Revenue and
   EBITDA margin expansion, driven by cost savings. While Revenue increased in Southern Africa, a challenging South African economy, cost inflation
   and investment in sales and marketing led to EBITDA margin contraction for the territory and consequently a strong focus on cost control over the
   remaining quarter has been implemented.
–  Net debt for the period ending September 2017 reduced to GBP326 million (30 September 2016: GBP392 million) and comprised GBP380 million of
   interest bearing bank debt, GBP25 million of finance leases, and GBP79 million of cash. The net debt leverage ratio reduced to 2.4x (30 September
   2016: 2.9x).
–  Virgin Active's commitment to product innovation and an outstanding membership experience is illustrated with the following highlights during the
   current period: (i) the trialling of a new group exercise focused studio format (approximately 1,000m2 footprint), with the May 2017 opening of Holland
   Village in Singapore and the September 2017 opening of Wireless Road in Bangkok, Thailand; (ii) the September 2017 opening of the group's first
   boutique cycle studio – Revolution by Virgin Active, in Milan, Italy; (iii) further progress on the member's digital journey, with the launch of online 
   joining in the UK; (iv) new group exercise formats including Pound (a dance based program from the US) and Punch (a boxing based format launched in the
   UK); and (v) later this year, Virgin Active will be the first to market an exciting global cycle innovation in partnership with Les Mills in Asia.
–  Virgin Active, in which Brait has an effective 71.9% (HY2017: 70.5%) economic interest post dilution for the performance based sweet equity granted
   to the Virgin Active management team, is valued at reporting date using an EV/EBITDA multiple of 11.4x (HY2017: 11.4x), which represents a discount
   of 17% to the peer group's three year trailing average multiple of 13.7x and a 15% discount to the peer average spot multiple. Applying the closing
   GBP/ZAR exchange rate of ZAR18.16, Virgin Active's carrying value is ZAR17.7 billion (HY2017: ZAR16.1 billion), which represents 41% of Brait's total
   assets (HY2017: 26%).

Premier
–  The Baking division, which constitutes nearly half of Premier's net revenue, has performed well in a highly competitive market, maintaining its average
   bread pricing over the six month reporting period. Whilst competitor promotional pricing put some pressure on sales volumes, Premier retained its
   national market share in the formal market across all its bread brands, with strong positions in the Western Cape, KwaZulu-Natal and Eastern Cape
   provinces. Premier continues to supply around 70% of its bread sales to the informal sector sales channel.
–  In a first to market in South Africa, Premier launched Blue Ribbon "Sandwich Squares", a sandwich alternative product, in the Gauteng market
   in February 2017. The product was subsequently rolled out in Kwa-Zulu Natal and Western Cape in September 2017, which has boosted sales
   volumes significantly.
–  The Milling division, which represents around a third of Premier's net revenue, has been impacted by the extreme commodity market pricing volatility,
   which is the main reason for the group's net revenue for the six months ending 30 September 2017 declining by 10%. The worst drought in 110 years,
   followed by the best maize crop ever had a significant effect on the price of white maize, causing the price per ton to drop 50% during the period
   December 2016 to April 2017.
–  Whilst Premier's cost saving initiatives meant that its operating costs remained in line with the prior period, margins in the Milling division were impacted
   as a result of the reduced demand for the expensive 2016 season crop. This led to lower trading volumes which delayed Premier's ability to mill lower
   priced new 2017 season crop until June 2017. The resulting decline in the Milling division's marginal contribution (being revenue after all production and
   direct selling costs) was the main factor in the group EBITDA decreasing by 24%, and the EBITDA margin of 8.3% for the current six month reporting
   period (six months ended 30 September 2016: 9.9%).
–  The Milling division's performance normalised in line with historical trends during the second quarter of FY2018.
–  Premier's Mozambican operations (CIM, the leading food and animal feed producer in that country) was negatively impacted by a combination of
   poor macro-economic conditions (currency devaluation and high interest rates) and the expensive maize positions which accounted for the bulk of
   the decline in CIM's EBITDA. CIM has shown signs of volume recovery in September 2017, with good momentum into October. A stabilised forex
   environment, improved margins in maize meal, the launch of a new biscuit line (producing creamed biscuits) and entry into the rice market (which is
   significantly larger than the maize meal market in Mozambique) underpin CIM's profitability recoverability. Elsewhere in the Groceries division, Sugar
   Confectionery and Lil-lets South Africa performed according to plan.
–  Following five years of significant capital expenditure, which resulted in an aggregate investment of some ZAR3 billion into a number of major
   completed projects that have generated both attractive returns and qualitative benefits, no major expansionary projects are forecast for FY2018.
   Premier repaid a further ZAR100 million of Brait's shareholder funding on 31 October 2017. Whilst ensuring growth is not compromised, Premier is
   forecast to make further shareholder funding repayments during the remainder of FY2018.
–  Premier, in which Brait owns 92.7% (HY2017: 91.4%), is valued at reporting date using an EV/EBITDA multiple of 12.4x (HY2017: 13.2x), which
   represents a discount of 7% to the peer group's average three year trailing multiple and a 10% premium to the peer group's average spot multiple.
   The reduction in valuation multiple is largely to take consideration of the trend over the past twelve months of the peer average spot multiple trading at
   an increased discount to its three-year trailing average. Premier's carrying value of ZAR12.0 billion (HY2017: ZAR13.5 billion) represents 28% of Brait's
   total assets (HY2017: 22%).

Iceland Foods
–  Iceland continues to grow through both new store openings and positive like-for-like ("LFL") sales.
–  Sales (in GBP) for the 24 weeks ended 8 September 2017 increased by 7.3%, with LFL sales 4.3% positive on the comparative period, reflecting an
   increase in both transactions and average basket values. In addition to this, Iceland benefited from sales generated by the net 17 new stores opened in
   the current period and the net 21 new stores opened in the previous financial year.
–  EBITDA growth for the period was 5.2%, driven by the improved sales performance.
–  Strong product innovation continues, with new ranges for summer 2017 and a comprehensive range of bread, cakes and morning goods launched
   under Iceland's own Luxury brand, together with forming a new partnership with Warburtons to become Iceland's sole supplier of branded
   bread products.
–  The "Power of Frozen" marketing campaign continues to maintain its focus on the high quality of Iceland's food and the award winning Online service,
   complemented by press advertising and door drops highlighting Iceland's value for money proposition.
–  Expansion of The Food Warehouse is on track, with 11 new stores opened in the period and 27 openings in the last 12 months taking The Food
   Warehouse estate to 47 stores at the period end. These larger stores have continued to perform well, with established stores achieving LFL growth.
–  The new Iceland format has been extended to 22 stores, with 19 refits completed during the period. These stores extend Iceland's customer appeal
   through their bold new modern look, improved in-store navigation and equipment and an extended product range. All are achieving LFL sales growth
   ahead of Iceland's average.
–  Iceland's Online business which leverages off its established Home Delivery infrastructure, continues to achieve strong LFL growth, with more than
   15,000 new registrations a week expanding the existing database of some two million customers. The business has benefited from investments to
   Iceland's website and head office team, as well as a growing awareness of the industry-leading levels of customer satisfaction achieved. This has been
   recognised through a number of awards, including "Online Retailer of the Year" at the IGD Awards in October 2017 and "Online Supermarket of the
   Year" in the Grocer Gold Awards in June 2017. In July 2017, Iceland opened its second dedicated online picking centre in Manchester, offering online
   customers in the area a wider range and better service. This releases 17 stores in the area from online picking, allowing them to focus on developing
   their traditional Home Delivery business for in-store purchases.
–  The group opened 18 stores during the period, with 1 store closure, resulting in a total estate of 919 stores. The UK store portfolio at the end of the
   period, including The Food Warehouse stores and two Online Picking centres, stood at 896.
–  Iceland remains highly cash generative, with cash balances on hand of GBP133.4 million. The reduction from the GBP170.6 million cash holding at the
   same point last year, reflects the redemption on 26 June 2017 of GBP50 million Floating Rates Notes ("FRN's") due in 2020.
–  After the period end, Iceland completed a refinancing of the majority of the FRN's and all the Senior Secured Notes ("SSN") due in 2021, by raising
   a new SSN of GBP550 million due 2025. The GBP170 million SSN due in 2024 remains in place. This refinance generates an annual interest saving
   of approximately GBP5.7 million and, assuming the remaining GBP79.5 million FRN's are repaid through internally generated cash, results in no
   refinancing requirement for Iceland until at least 2023.
–  Net debt, including finance leases, at reporting date of GBP687.4 million, has reduced to a net leverage ratio of 4.2x (HY2017: 4.6x), based on the last
   twelve months EBITDA.
–  Iceland Foods, which since April 2017 is 60.1% owned by Brait (HY2017: 57.1%), is valued at reporting date using an EV/EBITDA multiple of 9.0x
   (HY2017: 9.4x), which represents a discount of 21% to the peer group's average three year trailing multiple of 11.4x and a 20% discount to the peer
   group's average spot multiple. Applying the closing GBP/ZAR exchange rate of ZAR18.16, Iceland Foods' carrying value of ZAR8.5 billion (HY2017:
   ZAR7.7 billion) represents 20% of Brait's total assets (HY2017: 12%).
–  The Iceland Foods HY2018 debt investor presentation is available at www.brait.com.

New Look
–  The 26 week period ending 23 September 2017, reflects a disappointing performance, suffering from a combination of challenging market conditions
   and a number of self-inflicted issues. Group revenue (in GBP) decreased by 4.5% on the comparative period, with group LFL sales declining by 8.6%.
   UK LFL sales decreased by 8.4%. Third Party E-commerce sales increased by 17.0%, whilst Own Website Ecommerce declined by 7.6%.
–  In response to this underperformance, changes to the New Look leadership have been made. As announced on 1 September 2017,
   Anders Kristiansen stepped down from his role as CEO by mutual agreement. On 6 November 2017 Alistair McGeorge was appointed as Executive
   Chairman of New Look. Alistair has significant industry experience and the requisite expertise having previously led New Look's turn-round and
   recovery in 2011-2014. Furthermore, Tom Singh, New Look's Founder, has taken a more active product role, working alongside Roger Wightman,
   the reinstated Chief Product Officer.
–  Some of the key reasons for New Look's underperformance include: (i) its product positioning had moved away from its successful broad appeal,
   becoming too young and edgy; (ii) its customer messaging had become overly fashionable and in the process, no longer highlighting New Look's value
   proposition; (iii) excessive product options and increased complexity throughout the organization resulted in the business being late to certain trends
   and as a result not clearing ranges by season end; and (iv) reduced flexibility and speed as well as an increased cost base.
–  The following corrective measures are being taken: (i) a progressive return to broad appeal product at a great price, reconnecting New Look with
   its heartland customer and restoring its market position in keeping with its strong brand; (ii) strict focus and action already being implemented to
   reduce the cost base and preserve an adequate liquidity profile; (iii) applying a 'back to basics' mentality and clarifying store layout and messaging;
   (iv) optimizing the E-commerce platform; and (v) improving the planning cycle which should enhance speed and flexibility.
–  New Look has an adequate liquidity profile, with total cash, liquidity and operating facilities available of GBP242.5 million at reporting date.
–  Until such time as New Look's turnaround strategy has taken shape, New Look is valued at nil. Brait remains committed to being a long-term
   shareholder of New Look.
–  The New Look HY2018 debt investor presentation is available at www.brait.com.

Other investments
–  The decrease in carrying value over the twelve month period is largely due to the receipt of ZAR343 million proceeds, comprising mostly dividend
   income received from Brait's 81.3% investment in DGB, which continues to be the majority asset in this portfolio.
–  During September 2017, Brait IV signed a Sale and Purchase agreement to sell its investment in Primedia, with the transaction expected to complete in
   the last quarter of this calendar year.
–  At reporting date, the Other Investments portfolio carrying value of ZAR1.8 billion (HY2017: ZAR2.1 billion) comprises 4% of Brait's total assets
   (HY2017: 4%).

Low cost to AUM ratio
Operating expenditure for the six month period reduced to ZAR135 million (HY2017: ZAR228 million). On an annualized basis, using average AUM for the
period as the reference basis, operating costs are 0.61% (FY2017: 0.64%) and net after fee income are 0.54% (FY2017: 0.54%), compared to the target
of 0.85% or less.

Minimal balance sheet cash drag
To manage dilution of overall returns, the Group targets minimal cash holdings on balance sheet, whilst maintaining access to large undrawn committed
facilities. The Group's cash and equivalents position at 30 September 2017 of ZAR3.3 billion (FY2017: ZAR3.3 billion) represents 9.7% of NAV
(FY2017: 8.3%), which is well within the benchmark maximum of 25% of NAV.

Significant cash flow within the underlying assets over any 3 year period
Brait's portfolio of investments are highly cash flow generative with high earnings-to-cash conversion ratios.

Predictable and consistent ordinary dividend to NAV yield
The Group's policy is an ordinary bonus share issue or cash dividend alternative election, of 1% to 2.5% of closing NAV, considered annually when the
results for each year are published, taking into account the Group's available resources.

During the current six month period, a bonus share issue, with a cash dividend alternative, of 1% of ZAR78.15 per share, relating to the year ended
31 March 2017, was paid in August 2017 ("FY2017 Dividend"). In terms of shareholder elections, 26% elected to receive bonus shares, 43% elected
to reinvest their cash dividend of ZAR169 million and subscribe for new shares; with the remaining 31% electing to receive their cash dividend of
ZAR121 million.

ORDINARY SHARE CAPITAL
As a result of the shareholder elections for the FY2017 Dividend, during August 2017 the Company issued 1,665,192 bonus shares (August 2016:
387,339 bonus shares issued), as well as 2,921,849 new shares issued to shareholders that elected to reinvest their cash dividend. This resulted in
total issued ordinary share capital at 30 September 2017 of 525,599,215 shares of EUR0.22 each (FY2017: 521,012,174 shares). The Group held
17,475,070 treasury shares at 30 September 2017 (FY2017: 14,576,784 treasury shares held), resulting in ordinary share capital, net of treasury shares,
of 508,124,145.

CONVERTIBLE BOND
Brait's GBP350 million unsubordinated, unsecured convertible bonds are listed on the Open Market (Freiverkehr) segment of the Frankfurt Stock Exchange
("Bonds"). The Bonds have a five year term ending 18 September 2020 and carry a fixed coupon of 2.75% per annum payable semi-annually in arrears. In
accordance with the terms and conditions of the Bonds, Brait's bonus share and cash dividend alternatives issued / paid during the Bonds' term result in
adjustment to the Bonds' conversion price, which at reporting date is GBP7.7613. Using this latest adjusted conversion price, the Bonds' will convert into
45.096 million ordinary shares (8.6% of Brait's current issued share capital) on exercise of bondholder conversion rights. In the event that the bondholders
have not exercised these rights, the Bonds are cash settled at par value on maturity date.

In accordance with IAS 32 (Financial Instruments: Presentation), the Bonds' liability component is measured at reporting date as GBP323.9 million.
Applying the closing GBP/ZAR exchange rate of ZAR18.16, results in the Bonds' translated carrying value of ZAR5.9 billion.

GROUP FUNDING POSITION
The Group's committed revolving ZAR8.5 billion facility from First Rand Bank Limited (trading through its Rand Merchant Bank division) and The Standard
Bank of South Africa Limited is Rand denominated, bears interest at JIBAR plus 3.0% and is repayable quarterly, with the right to rollup capital and interest
repayments. This facility expires in December 2020 and is secured by Group assets. At 30 September 2017, the Group has available undrawn gearing
facilities of ZAR3.3 billion, resulting in total cash and available facilities of ZAR6.6 billion.

GROUP OUTLOOK
–  Virgin Active remains focused on delivering an outstanding member experience through continued innovation and investment. A streamlined, more
   cash generative UK estate, positive momentum in Italy and a strong pipeline in Asia Pacific provides good momentum and medium term growth
   opportunities in these territories. In South Africa, the challenging consumer market looks set to continue, consequently Virgin Active is moderating the
   roll-out pipeline, focusing future growth at lower price points, as well as trialling different membership options.

–  The extreme maize commodity price volatility significantly impacted Premier's milling business over the period January 2017 to July 2017. Having
   cleared through the expensive 2016 season maize, performance normalised during the second quarter of FY2018. With sales volumes increasing as
   the market restocks, the milling business expects to outperform the comparable period for the second half of FY2018. Premier continues to execute on
   its strategy of brand building, producing consistent quality offerings and product innovation, as well as operational efficiencies, with its core brands well
   positioned to compete in their respective markets.

–  Iceland's growth remains ahead of the market into its third quarter due to new stores, however LFL growth has softened due to tougher comparatives
   and increased value messaging by its competitors. The 50th Food Warehouse store opened in September 2017 and 34 new format Iceland store refits
   have now been completed and continue to perform well. The recent refinancing gives a strong platform from which to pursue Iceland's well-established
   long-term strategy for growth and deleveraging with the benefit of lower borrowing costs.

–  New Look's H2 FY2018 will remain difficult and thus the immediate focus is on short term stabilisation together with a strict focus on costs to preserve
   an adequate liquidity profile. The necessary changes have been made in senior management. New Look is a proven brand with a clear market position
   and thus when looking beyond FY2018, the 'back to basics' mentality and progressive return to broad appeal, with a heightened focus on an improved
   planning cycle combined with speed appropriate for today's market, will serve to reconnect New Look with its heartland customer. The business has
   the appropriate liquidity and operating facilities in place to implement its plans and thereby provide time to recover.

Brait continues to explore new pools of capital to enhance its capital structure and ensure that it is well placed to execute on opportunities. Driving value in
the existing portfolio remains the key focus for the year ahead.

For and on behalf of the Board

PJ Moleketi
Non-Executive Chairman

15 November 2017

Directors (all non-executive)
PJ Moleketi (Chairman)*, JC Botts^, AS Jacobs##, Dr LL Porter##, CS Seabrooke*, HRW Troskie**, Dr CH Wiese*

## British  ^American **Dutch *South African

Brait's primary listing is on the Euro MTF market of the Luxembourg Stock Exchange and its secondary listing is on the Johannesburg Stock Exchange.

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

Date: 15/11/2017 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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